A STUDY ON STRATEGIC PLANNING AND IMPLEMENTATION

Strategic Management:

According to Chandler, “Strategy can be defined as the determination of basic long term goals
and objectives of an enterprise and the adoption of the courses of action and the allocation of
resources for carrying out these goals”. In simple words, Strategic management is the tactical
action in various functional areas of the company to attract the market towards its product and
business units.

Company Profile:

AAA limited, which is originated in the late 1960’s is said to be one of the most well
known financial lending company having its branches to the total of 23 with in the country. The
business is all about financial lending for heavy commercial vehicles as well as medium
commercial vehicles. Taking in account the departments that operate in this company each
department has its own reason for existence and play a major role in the business as
interdependency is highly present. The following departments have a direct contribution to the
business and thus shortly discussed.

CARE – Customer Acquisition & Retention Dept:

This department is wholly responsible for generating lead for finding out potential customers in
the market and also to sell the products of the company. Marketing information systems are used
up to a greater extent as the study is confined to human resource information systems the
discussion further is thus limited.

CAP – Customer Appraisal Process: This department is wholly responsible for appraising the
potential customers demand for the loan and hence contributes for further business.
CAMP – Customer Asset Management Process: This department is responsible for collecting the
lended funds and ensures atmost retention of existing customers and proper receivables
management on time.

HRD – Human Resource Management Department

Attracting, Training, developing, retaining competent and productive people is the

basic reason for existence of this department and hence this mini – case study deals with the
information systems that are highly reliant on the entire human resource management process.

Electronic Data Processing: This case study is all about the integration of the E.D.P department
with that of all other departments in the company. This mini case study examines the existing
bonding that exists between the H.R department and the company as a whole. And hence they
are responsible for maintaining proper records for all the process of human resource process
through proper management and effective and efficient use of information is the question here.

Strategic Management & Implementation Team: As most of the companies do have a strategic
team this company is said to have an active team of members involving in the strategic formation
and implementation.

Corporate Values

Customer orientation

• Clearly communicate mutual intentions and expectations

• Listen and respond to our customers, suppliers and stakeholders

• Deliver innovative and competitive products and services

• Make it easy to work with us

• Be vendor of choice

Results orientation

• Set challenging and competitive goals

 • Focus on output

• Assume responsibility

• Constructively confront and solve problems

• Execute flawlessly

Quality

• Achieve the highest standards of excellence

• Do the right things right

• Continuously learn, develop and improve

• Take pride in work

Risk taking

• Foster innovation and creative thinking

• Embrace change and challenge the status quo

• Listen to all ideas and view points

• Learn from success and mistakes

• Encourage and reward informed risk taking

Great place to work

• Be open and direct

• Promote a challenging work environment that develops the workforce

• Work as a team with respect and trust for each other

• Recognize and reward accomplishments

• Manage performance fairly and firmly

• Be an asset to Intel’s communities world wide

Discipline

• Conduct business with uncompromising integrity and professionalism

 • Ensure a safe, clean and injury-free workplace

• Make and meet commitments

• Properly plan fund and staff projects

• Pay attention to detail

Structure of Strategy:

The strategic structure of AAA limited is

1. Internal Scanning

2. Strategic formulation

3. Strategic implementation

4. Evaluation and Control

5. Feed back/ Learning process

The flowchart which depicts the structure is as follows:

This is the structure of strategies of AAA limited and in the below session we shall have a
discussion on this part one by one.

Internal Scanning:

Internal Scanning is an overview/analysis on the industry, organization, competition and

functional areas with its internal strength and weaknesses and external opportunity and threats.
This includes industrial analysis and organization analysis. One of the approach of industrial
analysis is Porter’s five force model.

Porter’s Five Force model:

This theory deals with Industry analysis and Business strategy development, which was
published in the year 1979 by Michael E Porter of Harvard Business School.
According to Porter, the collective strength of these factors determined the ultimate profit
potential of the industry where profit potential is measured in terms of the long-run return on
investment of capital.

As the name suggests the industry has five forces from internal and external environment they
are depicted below.

Potential Entrants

Threat of New
Entrants

Other Industry
Stakeholders Competitors

Buyers
Relative Power of

Bargaining
Suppliers Rivalry among power of
Existing Firms
Bargaining
Power of Threat of Substitute
of product and

Substitute

Ist threat – New Entrants: The entrance of new customer poses high capital expenditure and
confidence of customers so the market might become sensitive.

IInd threat – Substitutes: Many retail companies are available as a substitute of its products.

IIIrd threat – Bargaining power: As this industry has very strong competitive rivalry the
bargaining power is also strong enough.

IVth threat – Suppliers: They have suppliers through out the world. Due to dual sourcing strategy
the threat is low in this industry.
Vth threat – Stakeholders: Stakeholders are the relative power of Unions, Government, etc. as a
financial servicing company AAA limited is having the threat the regular check of Government
through audit.

Strategy formulation:

Strategy formulation is often referred to as strategic planning or long-range planning and is

concerned with developing a corporation’s mission, objectives, strategies, and policies. It begins
with situation analysis: the process of finding a strategic fit between external opportunities and
internal strength while working around external threats and internal weaknesses.

Types of Strategies:

Business firms usually consider three types of strategies and the Company is said to
follow any or many of these types and formulate the strategy to capture the market in wide range.

 Corporate Strategy

 Business Strategy and

 Functional Strategy

Corporate Strategy:

Corporate Strategy provides the overall direction of the organization in terms of its
general attitude towards growth and management of business. Typically, they fit in three main
categories of stability, growth and retrenchment.

Growth Strategy:
 The company is having an excellent growth in its life span of 98 years. Its present growth
rate is 11.9% and the rate of increase in the year 2009 is 2.16%.

Diversification Strategy:

Since from the foundation of the company, they have a strategy to continuously diversify
the business in terms of product and market location. Starting as a small store now they have
globally diversified by capture foreign markets.

To prove the growth of the company, BCG growth strategy is been explained about the
company market and its growth range.

Market Share
High Low
Market Growth

Stars

(Financial service) Question Marks

Dogs
High

Cash cows (Food and Clothing)

In this model
Low

the company’s
SBU’s are
classified into
two dimensions:

• Market share on the Horizontal axis: This dimension serves to measure the strength of
the market position of the SBU.

• Market Growth on the Vertical axis: This dimension provides a measure of market
attractiveness and can identify its capacity to diversify as per its growth.

The financial service industry of AAA limited is start 30 years before. Now the financial service
is enjoying ‘Star’ phase. In the starting of the business or product the particular SBU is said to
have high growth rate in the competitive market where they are relatively strong than their
competitors. In order to sustain their growth they may need heavy investment frequently. Later
on automatically their growth will go slow and they their market share also will be low, which
leads to cash cows.

As the Food and Clothing of AAA limited is focused on differentiation generic strategy, its
market share is low with low industry growth. Thus the product is facing ‘dogs’. The company
has to renew strategy to raise its share and growth thus it can be turned as ‘star’. But it is weaker
with both the key factors so its expectation to be a ‘star’ is very less.

Business Strategy:

Business Strategy is the strategy followed at the business unit or product level. It
normally aims at improving the competitive position in the market served by that business unit.
Business strategy purely deals with the companies’ strength, weaknesses, threat and opportunity
of the company posed by internal and external forces. In business strategy SWOT Analysis is a
basic analysis based on which the company can make effective decision on strategy.

SWOT Analysis is an analysis of a company’s internal and external environment in order

to identify its Strength, Weakness, Opportunities and Threats.

Strength and Weaknesses can be identified by an internal analysis of the corporate. This
will bring a better understanding that Marks and Spencer is strong enough or where is requires
improvement within the business.

Opportunities and Threats can be identified by an external analysis, i.e., by an overview

from outside the company. This helps to understand the availability of new opportunities of the
company and its threats forces by external environment, in the short and medium term.

The SWOT of AAA limited is:

Strength
• One of the Top Retailers in UK.
 • Diverse ranges of Products
• Brand Image
• Large number of customers
• Financially strong
• 80000 numbers of talents
• Globalised supplier chain

Weakness
• Financial hindrance
• Finance are new products
• Product price
• Competitors products
• Substitutions

Opportunities
• Variety of new products
• Innovation as corporate value
• Diversified products
• Entrances of free new customer
• Overseas Supply chains
• Globalized market

Threats
• Competition Rivalry

• Volatility in Price of raw materials

• Political Force

• Market shift to Globalization

• Strategy
Functional strategy:

Functional strategy refers to the approach in a functional area to achieve corporate and
business unit objectives. It is concerned with the development of a distinctive competence to
provide an organization or a business unit with competitive advantage.

Market Strategy:

AAA limited poses a wide market where 21 million people visit the company in a weak
period.

 Food products are procured from UK and Europe territories

 Atmost 90% of the non-food products are procured from foreign market including India,
China, Bangladesh, Turkey and Sri Lanka territories.

Initial Strategy: Primarily the strategy of Marks and Spencer’s focus are,

• To expand product and

• to reach the market
o by exploring new opportunities and
o by establishing a strong brand image

Recent Strategy: In line with the initial strategy, the company is now emphasizing on expansion
in Eastern Europe and Asian markets. The company is exploring new businesses inspite of
expanding the product portfolio.

Strategy Implementation:

Strategy implementation is the sum total of the activities and choices required for the formation
of a strategic plan. It is the process by which strategies and policies are put into act through the
development of programs, budgets, and procedures. Although implementation is usually
considered after strategy has been formulated, implementation is a key part strategic
management. Strategy formulation and strategy implementation should thus consider as two
sides of the same coin.

Evaluation and Control:

Evaluation and Control information consists of performance data and activity reports. If
undesired performance results because the strategic management processes were inappropriately
used, operational managers must know about it so that they can correct the employee activity.
Top management need not be involved. If, however, undesired performance results from the
processes themselves, top managers, as well as operational managers, must know about it so that
they can develop new implementation programs or procedures. Evaluation and control
information must be relevant to what is being monitored.

Feedback/Learning Process:

Task – 2

Social, Cultural and Ethical Background of the AAA limited:

An effective tool to understand the background of a company is PESTLE analysis. It is an

analysis of factors like Political, Economical, Social, Technical, Legal and Environmental issues
which will affect the company positively and/or negatively. Let us see the PESTLE of AAA
limited.

Political: Following the European Integration and Free Trade Agreements, the market is let open
for the British Companies to invest in Eastern Europe territories. AAA being a British company
started to globalize and diversify it business to Europe and UK market during this period. But
Tesco and Lidl have already captured maximum of the market in the same period.

Economical: Retail sectors are highly prawn to recession and sensitive enough to changes in
interest rates. Economically Marks and Spencer have faced depression many times during the
event of 9/11 and economic recession. Whole economy is collapsed and the market too heavily
suffered. After the post 9/11 now the consumers are become optimistic and this make again the
retail industry is booming.

Social: Social issues are concerned to changes in consumer taste and lifestyle, which might give
opportunity or pose threats. Company enjoys opportunity when new market is open and new
customers enter into the company. Threats are the variability in social acceptance to alcohol. As
Marks and Spencer is giving importance to CSR activities it gained opportunities from its
stakeholders.

Technical: Technical issues are that now the management is following paperless operation,
online trading and it involves certain changes in retailing methods of sale of clothes. These
technologies are undertaken by IT system which benefits the company to work flexibly and
security.

Legal: All kind of companies have certain legislation to be followed for the sake of health and
safety both in terms of consumer rights and production of own natural renewable resources for
producing clothes.

Environmental: The renewable sources of resources used in producing clothes are cotton and
wool, which is eco friendly. With regard to this Marks and Spencer have made a five year of
Plan A to reduce the waste.

Mission Statement:

The mission statement of AAA limited can be viewed in three parts which include:

Vision – To be the Standard against which others are measured

Mission – To produce quality products and best service
Values – Quality, value, service, innovation and trust.

This mission statement has been framed in the year 1911 i.e., that is since the start of the
company AAA have worked to achieve this mission. AAA have kept to their even though they
have faced certain ups and downs.
AAA is one of the top retailers in UK, but yet they have to compete with many retailer giants
like tesco, M&S, Lidl, etc.

Objectives of Intel

The objectives of Intel is to extend the silicon technology and manufacturing

Evaluation and Control:

Evaluation and Control information consists of performance data and activity reports. If
undesired performance results because the strategic management processes were inappropriately
used, operational managers must know about it so that they can correct the employee activity.
Top management need not be involved. If, however, undesired performance results from the
processes themselves, top managers, as well as operational managers, must know about it so that
they can develop new implementation programs or procedures. Evaluation and control
information must be relevant to what is being monitored.

Evaluation Process:
The process of evaluation is as follows,

1. Determine what to measure: Top managers and operational managers need to specify
what implementation process and results will be monitored and evaluated. The processes
and results must be capable of being measured in a reasonably objectives and consistent
manner. The focus should be on the most significant elements in a process the ones that
account for the highest proportion of expense or the greatest number of problems.
Measurements must be found for all important areas, regardless of difficulty.
2. Establish Standards of performance: Standards used to measures performance and
detailed expressions of strategic objectives. They are measures of acceptable performance
results. Each standard usually includes a tolerance range, which defines acceptable
deviation. Standards can be set not only for final output, but also for intermediate stages
of production output.
3. Measure actual performance: Measurements must be made at predetermined times.
4. Compare actual performance with standards: if actual performance results at within
the desired tolerance range, the measurement process stops here.
5. Take corrective action: If actual results fall outside the desired tolerance range, action
must be taken to correct the deviation. The following questions must be answered:

• Is the deviation only a chance fluctuation?

• Are the processes being carried out incorrectly?
• Are the processes appropriate to the achievement of the desired standard? Action
must be taken that will not only correct the deviation, but will also prevent its
happening again.
• Who is the best person to take corrective action?

Flowchart which depicts the evaluation process

Task – 3
Strategy Implementation:

Strategy implementation is the sum total of the activities and choices required for the formation
of a strategic plan. It is the process by which strategies and policies are put into act through the
development of programs, budgets, and procedures. Although implementation is usually
considered after strategy has been formulated, implementation is a key part strategic
management. Strategy formulation and strategy implementation should thus consider as two
sides of the same coin.

Action Planning:

Activities can be directed toward accomplishing strategic goals through action planning. At a
minimum, an action plan states what actions are going to be taken, by whom, during what
timeframe, and with what expected results. After the program has been selected to implement a
particular strategy, an action plan should be developed to put the program in place.

AAA limited is a forward vertical integration (relatively balanced give and take of cultural and
managerial practices) through the acquisition of a retailing chain as its growth strategy. Now that
it owns it own retail outlets, it must integrate the stores into the company. One of the many
programs it would have to develop is a new advertising program for the stores.

Reengineering and strategy implementation;

Reengineering is the radical redesign of business processes to achieve major gains in cost,
service or time. It is not in itself a type of structure, but it is an effective way to implement a turn
around strategy.

Reengineering strives to bread away from the old rules and procedures that develop and become
ingrained in every organization over the years. These may be a combination of polices, rules and
procedures that have never been seriously questioned because they were established years
earlier. These may range from “credit decisions are made be the credit department” to “local
inventory is needed for good customer service’. These rules of organization and work design
were based on assumption about technology, people, and organizational goals that may no longer
be relevant. Rather than attempting to fix existing problems through minor adjustments and fine-
tuning existing processes, the key to reengineering is to ask if this were a new company, how we
would run this place.
Plan to implement the strategy:

1. Organize around outcomes, not tasks: AAA limited can design a department’s job around
the company with an objective or outcome instead of a single task or a series of tasks.

2. Have those who use the output of the process perform the process: with computer-based
information system, processes can now be reengineered so that the people who need the
result of the process can do it themselves.

3. Subsume information-processing work into the real work that produces the information:
Departments that production information can also process it for use instead of just
sending raw data to others in the organization to interpret.

4. Treat geographically dispersed resources as though they were centralized: with modern
information system, companies can provide flexible service locally while keeping the
actual resources in a centralized location for coordination purposes.

5. Link parallel activities instead of integrating their results: instead of having separate units
perform different activities that must eventually come together, have them communicate
while they work so that they can do the integrating.

Developing Dissemination, coordination and commitment:

AAA limited has to go for restructuring the organization chart to encourage the communication
facility so that they can meet the coordination within staffs.

The company has to conduct certain programs on effective working, organization have to go for
learning organization program so that the staff can be seen committed.

Conclusion:

Thus I would like to conclude that AAA limited is having a very good growth due to the growth
strategy. Another impressing strategy that they are following is